Captive consumption refund claims remain subject to unjust enrichment and Section 11B limitation, with belated claims barred

Refund of excise duty on captively consumed goods remains subject to the doctrine of unjust enrichment, so non-sale consumption does not by itself defeat that bar. Refund claims must also satisfy Section 11B limitation, and where no provisional assessment under Rule 9B exists, belated claims are time-barred. The stated legal position treats limitation as a pure question of law capable of being raised at the review stage. On that basis, the refund claims were rejected on both unjust enrichment and limitation, and the revenue position prevailed.

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Issues: (i) Whether refund of duty in respect of goods captively consumed was barred by the doctrine of unjust enrichment; (ii) whether the refund claims were hit by limitation under Section 11B of the Central Excise Act, 1944.

Issue (i): Whether refund of duty in respect of goods captively consumed was barred by the doctrine of unjust enrichment.

Analysis: The refund dispute on this aspect related only to duty paid on goods used captively. The settled legal position recognised that the doctrine of unjust enrichment applied even where the goods were not sold in the market and were consumed captively, and the claim could not succeed merely on that ground.

Conclusion: The issue was decided against the assessee and in favour of Revenue.

Issue (ii): Whether the refund claims were hit by limitation under Section 11B of the Central Excise Act, 1944.

Analysis: The claims were filed long after the relevant periods and there was no provisional assessment under Rule 9B of the Central Excise Rules, 1944. In such circumstances, the refund claims had to conform to the statutory limitation under Section 11B, and the belated filing rendered them time-barred. The legal position on limitation was treated as a pure question of law that could be raised at the review stage.

Conclusion: The issue was decided against the assessee and in favour of Revenue.

Final Conclusion: The department's appeal succeeded and the assessee's refund appeals failed, with the rejection of the refund claims standing on both unjust enrichment and limitation.

Ratio Decidendi: Refund of excise duty must satisfy the statutory conditions under Section 11B, including limitation, and the doctrine of unjust enrichment can apply even to captively consumed goods.

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